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U.S. Land Resources v. Borough of Roseland

24 N.J. Tax 484 (2009)

TAXATION — In the interest of justice, the County Tax Board and the Tax Court has discretion to relax the statutory requirement that a property owner appealing real estate taxes first must have paid the real estate taxes for the year of the challenge.

A property owner appealed its tax assessment with the county tax board which rendered a decision. The taxpayer, unhappy with the decision, appealed to the Tax Court. At the time the tax appeal was filed, the taxpayer had failed to pay real estate taxes for the year for which it challenged the assessment. About eighteen months after the tax appeal was filed, the municipality filed a motion to dismiss the tax appeal based on the taxpayer’s failure to pay the real estate taxes for the year in which it challenged the assessment as required pursuant to N.J.S.A. 54:51A-1(b).

The Tax Court noted that a municipality’s motion to dismiss a tax appeal must be brought in a timely manner. Here, the municipality had filed and withdrawn earlier motions to dismiss the case, and it was questionable if the municipality’s renewed motion to dismiss was brought within a reasonable time. However, the Tax Court noted that even if the motion had been brought in a timely manner, dismissing the tax appeal might not be appropriate. It found that the statutory requirement to pay the real estate taxes for the year of the challenge has a rational basis. Payment of real estate taxes as part of a tax appeal is required to prevent the interruption of the flow of municipal revenues while tax appeals are ongoing. On the other hand, the Tax Court also noted that the statute was changed in 1999 to give the County Tax Board and the Tax Court discretion to relax the tax payment requirement and fix payment terms in the interest of justice. The effect of the relaxed statute was that full payment of real estate might or might not be a precondition for filing a tax appeal, depending on the circumstances of each case.

The Tax Court then analyzed whether the payment requirement in this case should be relaxed in this case the interests of justice. It noted that when a taxpayer files a tax appeal without paying the property taxes, the municipality can either move to have the tax appeal dismissed or sell a tax sale certificate. Property taxes are not personal to the owner, but are levied against the property. So, if the taxes are paid through the sale of tax sale certificates to a third party, then it might not be appropriate to dismiss the tax appeal in light of the 1999 revision to the statute. The Tax Court noted that the legislature’s concern regarding the interruption of municipal revenues was not an issue in this case because the property taxes had actually paid through the sale of the tax certificate. It also noted that, in addition to the legislative goal of protecting tax revenues, there is an equal concern that all properties within a municipality are properly assessed so that the tax burden is properly shared among municipal property owners. In this case, the Tax Court found that, in light of the statute’s relaxation of the requirement to have real property taxes paid in full at the time of filing in the interest of justice, it would be inappropriate to dismiss the tax appeal when the tax bill was subsequently paid already paid through the sale of a tax sale certificate before the tax appeal was heard.

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